Skip to main content

Funko Reports 2023 Third Quarter Financial Results

-- Results Exceed Expectations --

Funko, Inc. (Nasdaq: FNKO), a leading pop culture lifestyle brand, today reported consolidated financial results for its third quarter ended September 30, 2023.

Third Quarter Financial Results Summary: 2023 vs 2022

  • Net sales were $312.9 million for the 2023 third quarter versus $365.6 million for the 2022 third quarter
  • Gross profit was $104.0 million, equal to gross margin of 33.2%, for the 2023 third quarter, which included $6.4 million of charges related to factory purchase order cancellations, versus 35.0% for the 2022 third quarter
  • SG&A expenses were $94.0 million for the 2023 third quarter, which included $9.9 million of one-time expenses comprised of $6.2 million primarily related to the termination of a lease agreement and $3.7 million for severance and related charges. This compares with $97.9 million for the 2022 third quarter, which included $1.1 million of one-time relocation costs in connection with the opening of a new warehouse and distribution facility in Buckeye, Arizona
  • Net loss was $15.0 million, or $0.31 per share, for the 2023 third quarter, versus net income of $9.6 million, or $0.19 per diluted share, for the 2022 third quarter
  • Adjusted net income* was $1.7 million, or $0.03 per diluted share, for the 2023 third quarter compared with $15.1 million, or $0.28 per diluted share, for the 2022 third quarter
  • Adjusted EBITDA* was $25.4 million for the 2023 third quarter compared with $35.7 million for the 2022 third quarter

“For the 2023 third quarter, net sales, adjusted net income and adjusted EBITDA exceeded our expectations,” said Michael Lunsford, Interim Chief Executive Officer of Funko. “Our solid overall performance was driven by strong direct-to-consumer sales, which were bolstered by the successful online launch of Pop! Yourself; improved sales to several of our larger US and European wholesale customers, due in part to growing sales of Bitty Pop!; and ongoing efforts to significantly reduce costs and enhance efficiencies.

“We also made progress on our plan to focus on Funko’s core products and reduce the number of product lines and complexity in our business. In addition, we re-aligned our senior management team to streamline decision making, to better collaborate and to improve cross-functional communication throughout the organization.”

Operations

“During the third quarter, we continued to make progress on improving operations and reducing costs,” said Steve Nave, Chief Financial Officer and Chief Operating Officer. “As expected, our gross margin increased and selling, general and administrative expenses as a percentage of net sales decreased compared with the second quarter of 2023. Both measures would have shown even more improvement if not for certain non-recurring charges in the quarter.

“We saw a partial cost savings benefit in the third quarter from the previously announced workforce reduction of approximately 180 positions; we expect to see the full benefit beginning in our current fourth quarter.”

Third Quarter 2023 Net Sales by Category and Geography

The tables below show the breakdown of net sales on a brand category and geographical basis (in thousands):

 

Three Months Ended September 30,

 

Period Over Period Change

 

2023

 

2022

 

Dollar

 

Percentage

Core Collectible Brands

$

233,269

 

$

282,412

 

$

(49,143

)

 

(17.4

)%

Loungefly Brand

 

57,439

 

 

 

59,562

 

 

 

(2,123

)

 

(3.6

)%

Other Brands

 

22,236

 

 

 

23,633

 

 

 

(1,397

)

 

(5.9

)%

Total net sales

$

312,944

 

 

$

365,607

 

 

$

(52,663

)

 

(14.4

)%

 

Three Months Ended September 30,

 

Period Over Period Change

 

2023

 

2022

 

Dollar

 

Percentage

Net sales by geography:

 

 

 

 

 

 

 

United States

$

208,895

 

$

262,316

 

$

(53,421

)

 

(20.4

)%

Europe

 

83,398

 

 

 

78,239

 

 

 

5,159

 

 

6.6

%

Other International

 

20,651

 

 

 

25,052

 

 

 

(4,401

)

 

(17.6

)%

Total net sales

$

312,944

 

 

$

365,607

 

 

$

(52,663

)

 

(14.4

)%

Balance Sheet Highlights - At September 30, 2023 vs December 31, 2022

  • Total cash and cash equivalents were $31.9 million at September 30, 2023 versus $19.2 million at December 31, 2022
  • Inventories were $162.1 million at September 30, 2023 versus $246.4 million at December 31, 2022
  • Total debt was $299.5 million at September 30, 2023 versus $245.8 million at December 31, 2022. Total debt includes the amount outstanding under the company's term loan facility, net of unamortized discounts, revolving line of credit and the company's equipment finance loan

Outlook for Fiscal 2023

Based on its current outlook, the company narrowed the net sales range of its 2023 full-year outlook and provided guidance for its 2023 fourth quarter, as follows:

 

Current Outlook

 

Previous Outlook

2023 Full Year

 

 

 

Net Sales

$1.065 billion to $1.105 billion

 

$1.05 billion to $1.12 billion

Adjusted EBITDA*

$20 million to $30 million

 

$20 million to $30 million

 

 

 

 

2023 Fourth Quarter

 

 

 

Net sales

$260 million to $300 million

 

 

Gross margin %

Increasing sequentially from Q3

 

 

SG&A expense, in dollars

Decreasing sequentially from Q3

 

 

Adjusted net income (loss)*

($4.2) million to $2.8 million

 

 

Adjusted net income (loss) per share*

($0.08) to $0.05

 

 

Adjusted EBITDA*

$16 million to $26 million

 

 

*Adjusted net loss, adjusted net loss per diluted share and adjusted EBITDA are non-GAAP financial measures. For a reconciliation of historical adjusted net loss, adjusted loss per diluted share, and adjusted EBITDA, to the most directly comparable U.S. GAAP financial measures, please refer to the “Non-GAAP Financial Measures” section of this press release. A reconciliation of adjusted net loss, adjusted net loss per diluted share and adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, for the fourth quarter of 2023 the Company expects equity-based compensation of approximately $4 million, depreciation and amortization of approximately $15 million and interest expense of approximately $6 million. For the full year 2023 the Company expects equity-based compensation of approximately $11 million, depreciation and amortization of approximately $60 million, interest expense of approximately $27 million, and severance and restructuring expenses of approximately $12 million, which includes the non-recurring lease exit and related costs taken in Q3-2023, each of which is a reconciling item to net loss. See "Use of Non-GAAP Financial Measures" and the attached reconciliations for more information.

Conference Call and Webcast

The Company will host a conference call at 4:30 p.m. ET (1:30 p.m. PT) today, November 2, 2023, to further discuss its third quarter results and business outlook. A live webcast and replay of the event will be available on the Investor Relations section on the Company’s website at investor.funko.com. The replay of the webcast will be available for one year.

Use of Non-GAAP Financial Measures

This release contains references to non-GAAP financial measures, including adjusted net income (loss), including per share amounts, adjusted EBITDA, and adjusted EBITDA margin, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance, for planning purposes, including the preparation of our annual operating budget and financials projections, and to assess incentive compensation for our employees, and to evaluate our capacity to expand our business. In addition, our senior secured credit facilities use adjusted EBITDA to measure our compliance with covenants such as senior leverage ratio. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods as they remove the impact of items not directly resulting from our core operations. The company also believes that including Adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors and help to compare against other companies in our industry. Non-GAAP financial measures have limitations as analytical tools and should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of adjusted net income (loss), including per share amounts, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner.

Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release.

About Funko

Headquartered in Everett, Washington, Funko is a leading pop culture lifestyle brand. Funko designs, sources and distributes licensed pop culture products across multiple categories, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who seek tangible ways to connect with their favorite pop culture brands and characters. Learn more at www.funko.com, and follow us on Twitter (@OriginalFunko) and Instagram (@OriginalFunko).

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our anticipated financial results and financial position, the underlying trends in our business, including retailer de-stocking, inflation and macroeconomic trends, our potential for growth, expectations regarding annualized cost savings and restructuring initiatives; benefits from changes to our management team; and our strategic growth priorities. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our ability to execute our business strategy; our ability to manage our inventories; our ability maintain and realize the full value of our license agreements; impacts from economic downturns; changes in the retail industry and markets for our consumer products; our ability to maintain our relationships with retail customers and distributors; risks related to the impact of COVID-19 on our business, financial results and financial condition; our ability to compete effectively; fluctuations in our gross margin; our dependence on content development and creation by third parties; the ongoing level of popularity of our products with consumers; our ability to develop and introduce products in a timely and cost-effective manner; our ability to obtain, maintain and protect our intellectual property rights or those of our licensors; potential violations of the intellectual property rights of others; risks associated with counterfeit versions of our products; our ability to attract and retain qualified employees and maintain our corporate culture; our use of third-party manufacturing; risks associated with climate change; increased attention to sustainability and environmental, social and governance initiatives; geographic concentration of our operations; risks associated with our international operations; changes in effective tax rates or tax law; foreign currency exchange rate exposure; our dependence on vendors and outsourcers; risks relating to government regulation; risks relating to litigation, including products liability claims and securities class action litigation; any failure to successfully integrate or realize the anticipated benefits of acquisitions or investments; future development and acceptance of blockchain networks; risks associated with receiving payments in digital assets; reputational risk resulting from our e-commerce business and social media presence; risks relating to our indebtedness, including our ability to comply with financial and negative covenants under our Credit Agreement, as amended; our ability to secure additional financing on favorable terms or at all; the potential for our or our third party providers’ electronic data or the electronic data of our customers to be compromised; the influence of our significant stockholder, TCG, and the possibility that TCG’s interests may conflict with the interests of our other stockholders; risks relating to our organizational structure; volatility in the price of our Class A common stock; and risks associated with our internal control over financial reporting. These and other important factors discussed under the caption “Risk Factors” in our quarterly report on Form 10-Q for the quarter ended September 30, 2023 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Funko, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

(In thousands, except per share data)

Net sales

$

312,944

 

 

$

365,607

 

$

804,850

 

 

$

989,666

 

Cost of sales (exclusive of depreciation and amortization shown separately below)

 

208,936

 

 

 

237,728

 

 

 

581,258

 

 

 

649,974

 

Selling, general, and administrative expenses

 

93,992

 

 

 

97,930

 

 

 

279,685

 

 

 

259,043

 

Depreciation and amortization

 

15,465

 

 

 

12,555

 

 

 

44,334

 

 

 

34,509

 

Total operating expenses

 

318,393

 

 

 

348,213

 

 

 

905,277

 

 

 

943,526

 

(Loss) income from operations

 

(5,449

)

 

 

17,394

 

 

 

(100,427

)

 

 

46,140

 

Interest expense, net

 

7,601

 

 

 

2,977

 

 

 

20,551

 

 

 

5,854

 

Loss on debt extinguishment

 

 

 

 

 

 

 

494

 

 

 

 

Gain on tax receivable agreement liability

 

 

 

 

 

 

 

(99,620

)

 

 

 

Other expense, net

 

98

 

 

 

926

 

 

 

519

 

 

 

1,758

 

(Loss) income before income taxes

 

(13,148

)

 

 

13,491

 

 

 

(22,371

)

 

 

38,528

 

Income tax expense (benefit)

 

3,076

 

 

 

2,342

 

 

 

130,859

 

 

 

(2,932

)

Net (loss) income

 

(16,224

)

 

 

11,149

 

 

 

(153,230

)

 

 

41,460

 

Less: net (loss) income attributable to non-controlling interests

 

(1,215

)

 

 

1,519

 

 

 

(9,912

)

 

 

7,276

 

Net (loss) income attributable to Funko, Inc.

$

(15,009

)

 

$

9,630

 

 

$

(143,318

)

 

$

34,184

 

(Loss) earnings per share of Class A common stock:

 

 

 

 

 

 

 

Basic

$

(0.31

)

 

$

0.21

 

 

$

(3.01

)

 

$

0.78

 

Diluted

$

(0.31

)

 

$

0.19

 

 

$

(3.01

)

 

$

0.73

 

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

Basic

 

48,237

 

 

 

46,874

 

 

 

47,641

 

 

 

43,670

 

Diluted

 

48,237

 

 

 

49,686

 

 

 

47,641

 

 

 

53,991

 

Funko, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

 

 

September 30, 2023

(Unaudited)

 

December 31,

2022

 

(In thousands, except per share amounts)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

31,885

 

 

$

19,200

 

Accounts receivable, net

 

166,934

 

 

 

167,895

 

Inventory

 

162,062

 

 

 

246,429

 

Prepaid expenses and other current assets

 

44,048

 

 

 

39,648

 

Total current assets

 

404,929

 

 

 

473,172

 

Property and equipment, net

 

95,389

 

 

 

102,232

 

Operating lease right-of-use assets

 

63,533

 

 

 

71,072

 

Goodwill

 

135,722

 

 

 

131,380

 

Intangible assets, net

 

171,261

 

 

 

181,284

 

Deferred tax asset, net of valuation allowance

 

 

 

 

123,893

 

Other assets

 

9,209

 

 

 

8,112

 

Total assets

$

880,043

 

 

$

1,091,145

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Line of credit

$

141,000

 

 

$

70,000

 

Current portion of long-term debt, net of unamortized discount

 

21,977

 

 

 

22,041

 

Current portion of operating lease liabilities

 

17,866

 

 

 

18,904

 

Accounts payable

 

70,178

 

 

 

67,651

 

Income taxes payable

 

1,136

 

 

 

871

 

Accrued royalties

 

61,857

 

 

 

69,098

 

Accrued expenses and other current liabilities

 

107,720

 

 

 

112,832

 

Total current liabilities

 

421,734

 

 

 

361,397

 

Long-term debt, net of unamortized discount

 

136,539

 

 

 

153,778

 

Operating lease liabilities, net of current portion

 

73,961

 

 

 

82,356

 

Deferred tax liability

 

385

 

 

 

382

 

Liabilities under tax receivable agreement, net of current portion

 

 

 

 

99,620

 

Other long-term liabilities

 

4,658

 

 

 

3,923

 

Commitments and Contingencies

 

 

 

Stockholders’ equity:

 

 

 

Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 48,727 and 47,192 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

5

 

 

 

5

 

Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 3,293 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

Additional paid-in-capital

 

318,782

 

 

 

310,807

 

Accumulated other comprehensive loss

 

(3,030

)

 

 

(2,603

)

(Accumulated deficit) retained earnings

 

(83,303

)

 

 

60,015

 

Total stockholders’ equity attributable to Funko, Inc.

 

232,454

 

 

 

368,224

 

Non-controlling interests

 

10,312

 

 

 

21,465

 

Total stockholders’ equity

 

242,766

 

 

 

389,689

 

Total liabilities and stockholders’ equity

$

880,043

 

 

$

1,091,145

 

Funko, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

Nine Months Ended September 30,

 

2023

 

2022

 

(In thousands)

Operating Activities

 

 

 

Net (loss) income

$

(153,230

)

 

$

41,460

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

Depreciation, amortization and other

 

42,592

 

 

 

34,390

 

Equity-based compensation

 

7,521

 

 

 

11,999

 

Amortization of debt issuance costs and debt discounts

 

944

 

 

 

670

 

Loss on debt extinguishment

 

494

 

 

 

 

Gain on tax receivable agreement liability adjustment

 

(99,620

)

 

 

 

Deferred tax expense

 

123,206

 

 

 

 

Other

 

(69

)

 

 

7,539

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

1,314

 

 

 

(10,198

)

Inventory

 

84,797

 

 

 

(106,061

)

Prepaid expenses and other assets

 

8,244

 

 

 

(32,310

)

Accounts payable

 

2,536

 

 

 

32,349

 

Income taxes payable

 

268

 

 

 

(13,303

)

Accrued royalties

 

(7,240

)

 

 

10,942

 

Accrued expenses and other liabilities

 

(14,624

)

 

 

(42,159

)

Net cash used in operating activities

 

(2,867

)

 

 

(64,682

)

 

 

 

 

Investing Activities

 

 

 

Purchases of property and equipment

 

(30,861

)

 

 

(46,908

)

Acquisitions of businesses and related intangible assets, net of cash acquired

 

(5,274

)

 

 

(13,967

)

Other

 

551

 

 

 

778

 

Net cash used in investing activities

 

(35,584

)

 

 

(60,097

)

 

 

 

 

Financing Activities

 

 

 

Borrowings on line of credit

 

71,000

 

 

 

90,000

 

Debt issuance costs

 

(1,957

)

 

 

(405

)

Payments of long-term debt

 

(16,911

)

 

 

(13,500

)

Distributions to Tax Receivable Agreement Parties

 

(1,110

)

 

 

(10,507

)

Proceeds from exercise of equity-based options

 

287

 

 

 

1,209

 

Net cash provided by financing activities

 

51,309

 

 

 

66,797

 

 

 

 

 

Effect of exchange rates on cash and cash equivalents

 

(173

)

 

 

(525

)

 

 

 

 

Net change in cash and cash equivalents

 

12,685

 

 

 

(58,507

)

Cash and cash equivalents at beginning of period

 

19,200

 

 

 

83,557

 

Cash and cash equivalents at end of period

$

31,885

 

 

$

25,050

 

The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income, for the periods presented:

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2023

 

2022

 

2023

 

2022

 

(In thousands, except per share data)

Net (loss) income attributable to Funko, Inc.

$

(15,009

)

 

$

9,630

 

 

$

(143,318

)

 

$

34,184

 

Reallocation of net (loss) income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock (1)

 

(1,215

)

 

 

1,519

 

 

 

(9,912

)

 

 

7,276

 

Equity-based compensation (2)

 

(916

)

 

 

4,677

 

 

 

7,521

 

 

 

11,999

 

Loss on extinguishment of debt (3)

 

 

 

 

 

 

 

494

 

 

 

 

Acquisition transaction costs and other expenses (4)

 

5,467

 

 

 

 

 

 

6,921

 

 

 

2,850

 

Certain severance, relocation and related costs (5)

 

3,703

 

 

 

1,070

 

 

 

5,784

 

 

 

8,203

 

Foreign currency transaction loss (6)

 

1,074

 

 

 

927

 

 

 

1,495

 

 

 

1,758

 

One-time inventory write-down (7)

 

 

 

 

 

 

 

30,084

 

 

 

 

Tax receivable agreement liability adjustments (8)

 

 

 

 

 

 

 

(99,620

)

 

 

 

One-time disposal costs for unfinished goods held at offshore factories (9)

 

 

 

 

 

 

 

2,404

 

 

 

 

One-time disposal costs for finished goods held at offshore factories (10)

 

6,148

 

 

 

 

 

 

6,148

 

 

 

Income tax expense (benefit) (11)

 

2,494

 

 

 

(2,699

)

 

 

146,144

 

 

 

(18,767

)

Adjusted net income (loss)

$

1,746

 

 

$

15,124

 

 

$

(45,855

)

 

$

47,503

 

Adjusted net income (loss) margin (12)

 

0.6

%

 

 

4.1

%

 

 

(5.7

)%

 

 

4.8

%

Weighted-average shares of Class A common stock outstanding-basic

 

48,237

 

 

 

46,874

 

 

 

47,641

 

 

 

43,670

 

Equity-based compensation awards and common units of FAH, LLC that are convertible into Class A common stock

 

4,443

 

 

 

7,150

 

 

 

4,430

 

 

 

10,321

 

Adjusted weighted-average shares of Class A stock outstanding - diluted

 

52,680

 

 

 

54,024

 

 

 

52,071

 

 

 

53,991

 

Adjusted earnings (loss) per diluted share

$

0.03

 

 

$

0.28

 

 

$

(0.88

)

 

$

0.88

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2023

 

2022

 

2023

 

2022

 

(amounts in thousands)

Net (loss) income

$

(16,224

)

 

$

11,149

 

 

$

(153,230

)

 

$

41,460

 

Interest expense, net

 

7,601

 

 

 

2,977

 

 

 

20,551

 

 

 

5,854

 

Income tax expense (benefit)

 

3,076

 

 

 

2,342

 

 

 

130,859

 

 

 

(2,932

)

Depreciation and amortization

 

15,465

 

 

 

12,555

 

 

 

44,334

 

 

 

34,509

 

EBITDA

$

9,918

 

 

$

29,023

 

 

$

42,514

 

 

$

78,891

 

Adjustments:

 

 

 

 

 

 

 

Equity-based compensation (2)

 

(916

)

 

 

4,677

 

 

 

7,521

 

 

 

11,999

 

Loss on extinguishment of debt (3)

 

 

 

 

 

 

 

494

 

 

 

 

Acquisition transaction costs and other expenses (4)

 

5,467

 

 

 

 

 

 

6,921

 

 

 

2,850

 

Certain severance, relocation and related costs (5)

 

3,703

 

 

 

1,070

 

 

 

5,784

 

 

 

8,203

 

Foreign currency transaction loss (6)

 

1,074

 

 

 

927

 

 

 

1,495

 

 

 

1,758

 

One-time inventory write-down (7)

 

 

 

 

 

 

 

30,084

 

 

 

 

Tax receivable agreement liability adjustments (8)

 

 

 

 

 

 

 

(99,620

)

 

 

 

One-time disposal costs for unfinished goods held at offshore factories (9)

 

 

 

 

 

 

 

2,404

 

 

 

 

One-time disposal costs for finished goods held at offshore factories (10)

 

6,148

 

 

 

 

 

 

6,148

 

 

 

Adjusted EBITDA

$

25,394

 

 

$

35,697

 

 

$

3,745

 

 

$

103,701

 

Adjusted EBITDA margin (13)

 

8.1

%

 

 

9.8

%

 

 

0.5

%

 

 

10.5

%

(1)

Represents the reallocation of net (loss) income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock in periods in which income was attributable to non-controlling interests.

(2)

Represents non-cash charges (recapture of charges) related to equity-based compensation programs, which vary from period to period depending on the timing of awards and forfeitures

(3)

Represents write-off of unamortized debt financing fees for the nine months ended September 30, 2023.

(4)

For the three and nine months ended September 30, 2023, includes costs related to the termination of a lease agreement and related expenses, partially offset by acquisition-related benefits. For the nine months ended September 30, 2022, includes acquisition-related costs related to investment banking and due diligence fees.

(5)

For the three and nine months ended September 30, 2023, includes charges to remove leasehold improvements and return multiple Washington-based warehouses, and charges related to severance and benefit costs for a reduction-in-force. For the three and nine months ended September 30, 2022, includes charges related to one-time relocation costs for U.S. warehouse personnel and inventory in connection with the opening of a new warehouse and distribution facility in Buckeye, Arizona.

(6)

Represents both unrealized and realized foreign currency gains and losses on transactions denominated other than in U.S. dollars, including derivative gains and losses on foreign currency forward exchange contracts.

(7)

For the nine months ended September 30, 2023, represents a one-time inventory write-down to improve U.S. warehouse operational efficiency.

(8)

Represents reduction of the tax receivable agreement liability as a result of recognizing a full valuation allowance of the Company’s deferred tax assets and anticipated inability to realize future tax benefits.

(9)

For the nine months ended September 30, 2023, represents one-time disposal costs related to unfinished goods held at offshore factories.

(10)

For the three and nine months ended September 30, 2023, represents one-time disposal costs related to finished goods held at offshore factories, primarily due to customer order cancellations.

(11)

Represents the income tax expense effect of the above adjustments, except for the tax liability receivable adjustment. This adjustment uses an effective tax rate of 25% for all periods presented. For the nine months ended September 30, 2023, this also includes $123.2 million recognized valuation allowance on the Company’s deferred tax assets. For the nine months ended September 30, 2022, this also includes the $11.0 million discrete benefit from the release of a valuation allowance on the outside basis deferred tax asset.

(12)

Adjusted net (loss) income margin is calculated as Adjusted net (loss) income as a percentage of net sales.

(13)

Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of net sales.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.